Home equity increased in Q3, Oil prices higher today, Monetary Policy Statement to be released Wednesday
December 12, 2016
CoreLogic, a leading provider of consumer, financial and property information, reported on Monday that U.S. homes with negative equity decreased more than 10% in the third quarter of 2016. Homeowner equity increased by 3.1% or $227 billion in the third quarter from the second quarter of 2016. The rise in equity saw 384,000 borrowers come out of negative equity and increased the number of homes with positive equity to 93.7% in the third quarter. Higher home prices were the catalyst behind the decrease in negative equity, with paydown of principal coming in second.
Oil prices are gushing higher today after a group of non-OPEC countries agreed to additional cuts in production, a move to reduce the vast amount of oil flowing through global pipelines. West Texas Intermediate (WTI) oil was up $2.00 in early trading to $53.50 per barrel, the highest levels since July 2015. The rise in oil has pushed gas prices at the pumps higher. The national average price for a regular gallon of gasoline is at $2.20, up slightly from a month ago and from $2.01 a year ago.
The scheduled two-day Federal Open Market Committee meeting kicks off on Tuesday and will end Wednesday at 2:00 p.m. ET with the release of the monetary policy statement. It is expected that the short-term Fed Funds Rate will rise by 0.25%, the first rise since December 2015 bringing the rate to the 0.50% to 0.75% range. Fed members feel that a rate hike is necessary given the fact that the labor market continues to improve while inflation is edging higher. Once the statement is released, Fed Chair Janet Yellen will hold a press conference at 2:30 p.m. ET.